Question! Do you have your (or your corporation’s) retirement plan in place?
If not, and if you have some cash, you can put it into a retirement plan to obtain a tax deduction for 2023.
For most defined contribution plans, such as 401(k) plans, you (the owner-employee) are both an employee and the employer, whether you operate as a corporation or as a sole proprietorship. This is excellent news because you can make both the employer and the employee's contributions, allowing you to put away a good chunk of money.
2. Claim the New, Improved Retirement Plan Start-Up Tax Credit of up to $15,000
By establishing a new qualified retirement plan (such as a profit-sharing plan, 401(k) plan, or defined benefit pension plan), a SIMPLE IRA plan, or a SEP, you can qualify for a non-refundable tax credit that’s the greater of
$500 or
the lesser of (a) $250 multiplied by the number of your non-highly compensated employees who are eligible to participate in the plan, or (b) $5,000.
The law bases your credit on your “qualified start-up costs.” For the retirement start-up credit, your qualified start-up costs are the ordinary and necessary expenses you pay or incur in connection with:
The establishment or administration of the plan, and
The retirement-related education of employees for such plan.